In a new development, DeFiLlama's on-chain data sample that Pump.fun, a launchpad on Solana that allows users to create and deploy tokens, primarily meme coins, generates more fees than some of the major protocols on Solana and ethereum.
Pump.fun generates more fees than ethereum
Data from DeFiLlama shows that the launchpad generated $5.3 million in fees in the last day alone. At this rate, it’s almost double the $2.3 million generated by Lido, one of the leading liquidity staking platforms on ethereum.
Interestingly, Pump.fun generates more fees than ethereum, a network known for charging relatively higher gas fees than all other blockchains. Over the past day, ethereum generated $1.67 million in fees.
Meanwhile, Solana transfers and smart contract deployment on-chain saw the platform distribute $1.32 million in fees to validators. Interest in Pump.fun also saw the network overtake Tron, which dominates USDT transfer. Over the past day, Tron generated $1.15 million in fees.
The growing interest in Pump.fun, which explains the rise in on-chain gas fees, could be due to its value proposition. Through this launchpad, users can not only create but also instantly swap tokens for less than $2 with “just one click,” according to its description on x. It is the ease of use and the rise in popularity of meme coins on Solana that has catapulted Pump.fun to the forefront of cryptocurrencies.
Plans to make token minting a success
As Pump.fun grows, generating millions in commissions, investigation results point to other problems. It is emerging that x.com/newtoneinsteinx/status/1822117050464260458″ target=”_blank” rel=”noopener nofollow”>less than 0.002% of all tokens deployed from the launchpad eventually reach a market cap of $1 million.
Out of the millions of meme coins that were launched, only 41 maintained a market cap of $1 million for a few weeks. The poor performance could be due to the fact that most of the meme coins that are launched do not offer any value and are simply for entertainment.
In a new x.com/pumpdotfun/status/1821699366630879383″ target=”_blank” rel=”noopener nofollow”>update On August 9, Pump.fun announced that it plans to make changes and incentivize the creation of more successful tokens. Therefore, the launchpad will not charge any fees to users when deploying a new token.
In the previous agreement, users had to pay approximately $2 worth of SOL to create tokens. This fee is now passed on to the first buyer of the token.
Overall, the goal is to encourage developers to at least push their tokens through the critical “bonding curve” stage, bringing their market cap to at least above $70,000. If the token passes this phase, it will automatically be listed on Raydium while the issuer will receive 0.5 SOL.
Featured image from Canva, chart from TradingView
